Councils must protect access to social care to receive extra £2bn in funding

Councils will have to “protect access to social care” to get hold of £2bn in additional funding from the NHS designed to promote integrated care, the government has said.

In the spending review announcement in June, chancellor George Osborne said a £3.8bn “pooled budget” would be set up to fund integrated health and social care in 2015-16 to reduce hospital episodes for older and disabled people.

Of the £3.8bn, £1.8bn is pre-existing resources being spent across health and social care, but the other £2bn is new funding that will be transferred from the NHS into the pooled budget.

Social care services ‘must be protected’

“To access this funding, all areas will need to produce local plans, signed off by the NHS and local authorities, for how the money will be used across health and social care,” said health minister Earl Howe in a debate on the Care Bill on Monday. “These plans must demonstrate that social care services will be protected.”

Also, half of the £2bn will be paid to councils and NHS clinical commissioning groups on the basis of outcomes achieved; part of this £1bn payment will be made in April 2015 on the basis of outcomes in 2014-15 and the rest made during the year on the basis of outcomes in 2015-16.

It is not clear what would constitute protecting social care, but in a statement, a Department of Health spokesperson said local areas would have to set out how they would protect “access to social care”. This could mean that councils could meet the test by maintaining eligibility thresholds at 2014-15 levels even if they cut funding for social care in real terms in 2015-16. However, all councils would need to implement the government’s new national minimum threshold for care in 2015, making comparisons with eligibility thresholds in 2014-15 problematic.

The DH spokesperson said it had begun talks with the Local Government Association and the NHS England to work out the details of how the money would be accessed.

The DH also provided details of the pre-existing £1.8bn that would be rolled up within the pooled budget in 2015-16:

• £1.1bn represents money that the NHS will transfer to councils for adult social care in 2014-15, a continuation of transfers that have taken place since 2011;
• £300m is money that the NHS spends annually on reablement services;
• £130m in annual spending on carers;
• £350m in capital grants distributed by the Department of Health and Department for Communities and Local Government (DCLG).

No let-up in cuts to council budgets

Even if all of the £3.8bn pooled budget were counted as money for local government, overall council budgets are set to shrink by 2.3% in real terms in 2015-16 due to sharp cuts in funding from the DCLG. This will add further strain to adult care budgets, which have been reduced by 20% since 2011, once inflation and demographic pressures have been taken into account.

This context led several peers to warn ministers of a substantial gap between public resources for social care and levels of need and demand for care, in Monday’s debate.

Former Labour health minister and ex-social services director Lord Norman Warner said councils would face a funding gap of about £2.5bn in 2015-16, the year in which the most of the Care Bill comes into force, bringing with it significant new duties for councils. He said this meant the resources were not in place to implement the bill’s “good intentions”.

“However you cut the figures, there is a pretty big hole in the base budget for adult social care in the year in which the first tranche of the bill’s reforms begin,” he warned.

Warner proposed an amendment to the bill for the government’s independent Office of Budget Responsibility (OBR) to carry out a review of the adequacy of public funding for social care and the financial implications of the Care Bill in 2014. Though backed by Labour and crossbench peers, this was rejected by Howe on the grounds that it was the government’s job to decide spending priorities and what was affordable.

“Any further review by the OBR would clearly cut across that process,” he said.

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